Poor countries are not fretting about the boundaries between state and market. Instead, they are debating whether to rely on domestic or foreign demand

A STRIKING feature of the worldwide economic crash is what hasn't happened. While rich countries agonise about whether Anglo-Saxon capitalism should be replaced by the French version (and the French flirt with revolutionary socialism), emerging markets have stayed angst-free. Arvind Subramanian, an Indian economist, says there has been “no serious questioning of the role of the market.”

That may sound like an exaggeration. As in rich countries, the state's role in many poor ones has increased as a result of the recent global meltdown. China's 4 trillion yuan ($587 billion) stimulus package last year will benefit state-owned enterprises. Its sovereign-wealth funds have been buying stakes in publicly-traded companies and (as in America and Europe) state subsidies have been flowing to loss-making industries, such as carmakers.

In India, critics of liberalisation have gained ammunition. They have long cautioned against giving foreign banks freer rein or allowing pension funds to invest more money in stockmarkets, leading one prominent magazine to ask, “did the left save India?” Some economists called the central bank timid last year for resisting attempts to let international capital flows dictate the value of the rupee. It now feels vindicated. Depositors have also been shifting away from private banks—former stars of the new Indian economy—towards once-unfashionable state-owned ones. While private banks retrench, state ones are expanding their lending vigorously.

Yet such state intervention is driven not by ideology but, mostly, by pragmatism. In China the Adam Smith-toting prime minister, Wen Jiabao, argues that his country “would rather speed up reforms” to combat the crisis and should “give full play to market forces in allocating resources”. Whereas American and European countries have re-regulated business, China, set on meeting its 8% growth target, has continued to liberalise. This year, for example, it removed some barriers that curbed the yuan's use in international trade.

Few if any serious attempts have been made to restore state ownership. When Embraer, a formerly state-owned aircraft manufacturer in Brazil, laid off thousands of workers, unions demanded its renationalisation—in vain.

In other words, emerging markets have adopted different policies, as well as ignoring the rich world's philosophical agonising. But why?

The first reason is that the global crisis originated in America and Europe and inflicted itself on the rest of the world. So emerging-market governments see little reason for painful self-examination in response to other people's problems. Moreover, the largest emerging markets are beginning to see hints of recovery. China's output was 6% higher in the first quarter of this year than it had been in the same period in 2008. Chinese and Indian manufacturing output rose in April, pushing Asian stockmarkets up sharply. Though these are merely short-term gains, they are enough to deflect navel-gazing for the moment.

Second, in many emerging markets, the state is fairly large already, especially in banking. The current demarcation between state and market commands broad public support and the main issue, as Mr Subramanian puts it, “is how to continue reducing [the state's] role in a gradual and pragmatic manner.” So even if the demarcation line shifts statewards in rich countries, emerging markets are well beyond that point already, and see little advantage in moving the line any farther.

Tricks of the trades

Yet the global crisis has provoked anguished disagreement about an equally fundamental matter: how much to rely on exports and how much on domestic demand. At this month's annual meeting of the Asian Development Bank, minister after minister said countries should rely more on each other and less on selling to America. Thirteen Asian countries also agreed to create a $120 billion fund—part of a nine-year-old system of swap agreements called the Chiang Mai initiative—from which they can (in theory) draw when financial pressures become acute.

How this would work in practice is uncertain. But the impetus behind it is clear: pooling risk expresses Asian fellow feeling and common Asian caution about both the International Monetary Fund and further fallout from America's crisis. Emerging countries concluded from the financial crises of the 1990s that they could not rely on fickle foreign capital. Now the collapse of international trade is causing them to wonder whether they can rely on fickle foreign customers.